Corporation structure and practice to reflect our social and environmental needs in society with long-term benefits beyond those of shareholders to society and the environment at large.
The dominant ideology of corporate business is largely understood to mean that corporate boards have a fiduciary duty to shareholders to maximise both profit and investor returns. This approach has led the concept of “shareholder primacy” to become widely accepted, allowing a corporation to action which may be at the detriment of employees, the environment, and society’s needs as a whole. Profit comes at a price.
With innovative future-just policies and appropriate market signals, businesses can lead the way in securing a sustainable future by pursuing broader mandates with the correct legal frameworks to reach social and environmental goals. Such frameworks already exist and corporations are now beginning to be provided with the tools which allow them to connect both private and public interests where profit is not at the expense of society as a whole and sustainability is key.
Some policy advances have already been made with a variety of companies considering the external costs of their activity as well as their environmental impact and social consciousness. A recent survey (Ethical Corporation) found that two thirds of CEO respondents perceived a link between increased revenue or business and sustainability activities, while almost 90% understood the importance of sustainability to business strategy, hinting that a positive tipping-point in wider business vision could be secured with the right policies in place.
In a globalised market, a corporation’s decisions and behaviour can have a profound interconnected effect on the respect of human rights, climate stability and environment health worldwide. By providing the framework for alternative business practices, corporations can become more accountable, transparent, and beneficial to society and the environment, while also pursuing profit. Social and environmental concerns are not mutually exclusive to profit and with the right policies in place to facilitate innovation, business has a key role to play in securing a sustainable world for future generations.
Benefit Corporation Legislation
Where did the idea for legislation come from? The Benefit Corporation legislation is spreading rapidly across the States as a new model for business. Find out more about at bcorporation.net!